2-year delay in rendering arbitral award not by itself a ground to set it aside: Delhi High Court

The Delhi High Court has held that an arbitral award delivered unanimously by an tribunal cannot be set aside solely because two years elapsed between the reserving and rendition of the award [Unison Hotels Private Limited v, Iffco Tokio General Insurance Company Limited].

A Division Bench of Justices C Hari Shankar and Vinod Kumar said that delay is not, by itself, a ground to set aside an award in the Arbitration and Conciliation Act, 1996.

"Delay becomes fatal only where it is unexplained, and imperils the findings in the award," the Court said.

The Court set aside a single judge’s order that had annulled an arbitral award in favour of Unison Hotels Private Limited against IFFCO Tokio General Insurance Company Limited, citing a 2-year delay in pronouncing the award.

The dispute arose from a fire at Unison Hotels’ Grand Hotel in Vasant Kunj, New Delhi on January 26, 2008. The hotel was insured under two policies issued by IFFCO Tokio. Unison claimed ₹68.64 crore and ₹100 crore, while the insurer paid ₹20 crore and ₹30 crore, later contending that the claims had been fully settled.

Unison invoked arbitration over the shortfall. A 3-member tribunal reserved the award on March 6, 2021, but pronounced it on March 6, 2023, awarding ₹65.12 crore with 9% annual interest and ₹50 lakh in costs.

The insurer challenged the award under Section 34, citing the delay and disputing arbitrability. The single judge allowed the plea and annulled the award.

The Division Bench disagreed. It noted that the tribunal had explained the delay by referring to the COVID-19 pandemic, delayed written submissions and difficulties in convening its members. It also found that the award comprehensively addressed the disputes and that no specific finding had been shown to have been affected by the delay.

The Bench quashed the January 30, 2026 order and remanded the insurer’s Section 34 petition for fresh consideration by the single judge. 

Senior Advocates Darpan Wadhwa and Rajiv Nayar with Advocates Ajay Bhargava, Shivank Diddi, Arsh Alok and Sanjana appeared for Unison Hotels.

IFFCO Tokio was represented through Senior Advocate AS Chandhiok along with Advocates Bindu Saxena, Tanpreet Gulati, Aparajita Swarup and Dhruv Chandra Saxena.

[Read Judgment]